Buying bitcoins

PrzemoF

Math would stop you.
Read about MD5/SHA256 and total number of unique bitcoin addresses. Generating thousands of billions of transactions wouldn't be enough - total number of bitcoin addresses is 1,461,501,637,330,902,918,203,684,832,716,283,019,655,932,542,976, so matching it later with a hash of an image would require pure magic, not "a bit of editing"

Similar service, just on-line: http://proofofexistence.com/about

alb

Thargor wrote: »

Whats to stop me from doing a few thousand micro-transactions this week and using them as an excuse for whatever I want going forward with a bit of editing? Theres better ways to do that kind of thing, ways that would actually stand up in court.

Let's do a demonstration. Lets say we wanted to prove at any time in the future that the comment I just quoted from you existed today. First thing we do is get the hash of the comment, this is a fixed length unique fingerprint of it. If you go to http://www.xorbin.com/tools/sha256-hash-calculator and paste your comment into the data field and click the button you'll get

3cf9eb4998923809b05c6914780f74b70153a1b4b461834ea28df1f85a0afe6d

Only your exact comment generates that hash, it's impossible to find different data that will generate the same hash. Your comment will always give that hash as a result. Try changing even one character in your comment and calculating it again and you'll see what I mean.

You can do this for any data of any size, whether it's the entire works of Shakespeare, or a photo, or even a bunch of other hashes. You'll always get a unique hash of the same length that will fit in a bitcoin transaction.

Now, if the above hash is included in a bitcoin transaction on the blockchain today, it will be timestamped and no one can ever edit that transaction again, It proves that it existed today. There is precedent already for the blockchain being used as evidence in court, it was done so in the US in the silk road trial.

If you made that transaction from a bitcoin address from which only you have the private key, it can be inferred that at least you had access to the comment at that time.

Taking this a step further https://www.ascribe.io/ are providing a user friendly way to register ownership of artwork using this technique. This is really interesting, and it enables crazy stuff like ownership of limited editions of digital images I didn't really grasp how cool this was until I watched this talk by the founder. It's an hour long, but if you're curious about the kind of problem this solves (and it's a big one) it's interesting. He talks as much about the problem itself and the 'why' as he does the service and how it works.

scamalert

https://www.ascribe.io/ - is this some sort of new hipster tax program ?
why would someone want to buy digital art ,more so to own it
And also if system only recognizes original-how does it prevent someone making micro adjustment and avoiding such nonsense ?

pH

Capt'n Midnight wrote: »

One development is that organisations are storing data using bitcoin transactions.

It's a very cheap way for them to rubber stamp something using a micropayment and include the data in the transaction record that's now added to the blockchain. Stuff like itemising all their assets and creating a worldwide backup for a fraction of the cost it would take if they weren't being subsidised by the bitcoin community.

You what?

Bitcoin blocksize is currently 1MB - and there's one created every 10 minutes - that's 6MB per hour of data being added to the blockchain (but normally less as each block is never actually 1MB). This is currently a theoretical storage amount of approx 50GB per year - in practice it's been more like 20GB.

Given that companies like dropbox are offering 1,000 GB for $99/year, it looks like if you could use the entire blockchain for your personal storage (you couldn't and you wouldn't want to because while you can encode some data in the blockchain it's not efficient at all) this would save you (at dropbox current prices) $1.98

scamalert

^^ he said stamp data,as in digital water mark that's being used currently-only bitcoin one is used from the block chain.

While idea is presented as ground breaking-seems more like useless to me and as some sort of way to make bitcoin more appealing to public.

Since someone could stamp digital document/file to verify its authenticity,yet if you were to scan it from paper-no 2 copies would be the same,same would happen if file was changed by single bit,thus file could look the same but program would show its not.

pH

scamalert wrote: »

^^ he said stamp data,as in digital water mark that's being used currently-only bitcoin one is used from the block chain.

No he said:

"itemising all their assets and creating a worldwide backup for a fraction of the cost"

By normal common usages of the terms "itemising" and "creating a backup" this has little to do with watermarking.

People above have posted how the blockchain allows you prove that you were in possession any any chunk of digital data at a point in time if you managed to store a hash/fingerprint of that data in the blockchain.

condra

Just discovered www.bitcove.ie this evening.
Very slick and simple website.

Gutted that AIB still require their customers have a card reader to make transfer funds online, but soon as it arrives, I'll be buying some Bitcoin from Bitcove.

Mullicker

Came across this article a couple of months ago, governance and ability to handle large transaction volume have bitcoin a little stumped:

The Looming Problem That Could Kill Bitcoin

makeorbrake

Mullicker wrote: »

Came across this article a couple of months ago, governance and ability to handle large transaction volume have bitcoin a little stumped:

The Looming Problem That Could Kill Bitcoin

Facing adversity but most likely, its something that will be resolved.

http://spectrum.ieee.org/computing/networks/the-clock-is-ticking-on-bitcoins-future

Many are backing it with confidence as the btc price has gone up in recent weeks.

smash

Impressive climb

PrzemoF

It could be the EU ruling on VAT for bitcoins...

scamalert

if bitcoin value was to drop below 200$ ,it wouldn't last a month.That said chart looks interesting is there a way to see total volume of trades on given days.

Since with limits being close,difficult level increasing rapidly main miners are chinesse who can afford to run so much power and gear,thus while being free currency-its rather split into few large pools that can afford to mine it and have monopoly over it.As for buying them as investment-its a lot of gamble since btc dont create value as real currencies does,then add complexity to whole process,and massive fluctuations,its not much as trying luck on forex with huge leverage in same sense.

Plus if actually buying them-the whole process of safe keeping and transactions makes little sense,unless your shopping in places like agora.

PrzemoF

scamalert wrote: »

[..]As for buying them as investment-its a lot of gamble since btc dont create value as real currencies does,then add complexity to whole process,and massive fluctuations,its not much as trying luck on forex with huge leverage in same sense.

Plus if actually buying them-the whole process of safe keeping and transactions makes little sense,unless your shopping in places like agora.

Real currencies create value? Hmm.... The process of safe keeping is simple and flexible. You can do it yourself or you can trust others. You cannot have a backup of your 50 euro note, while having a backup (even a paper copy!) of bitcoins is easily possible.

makeorbrake

Bitcoin surges - emerging from lull of interest.

RoRo979

well people what are we speculating? 2 weeks about bought 500 worth of btc at 220 a pop I believe so I've made a handy bit of money on top. Do we think it will hold now or do we feel a drop is coming? I personally dont feel a break above 450 happening so am wondering whether I should buy some physical goods now with it incase it drops or if its ok to hold for a bit and see what happens.

alb

scamalert wrote: »

if bitcoin value was to drop below 200$ ,it wouldn't last a month.That said chart looks interesting is there a way to see total volume of trades on given days.

It already did drop under $200 in January, bitstamp closed at 171 on 14th Jan, and was back over $200 the next day - plenty of people willing to scoop up those cheap coins. You can see charts including volume candles for all the major exchanges at https://cryptowat.ch/ Top left allows you to choose exchange and time frame.

Mullicker wrote: »

Came across this article a couple of months ago, governance and ability to handle large transaction volume have bitcoin a little stumped:

The Looming Problem That Could Kill Bitcoin

A lot of people, even many bitcoiners, have a hard time accepting that no one is in charge of, or in control of bitcoin. The issue of increasing the blocksize is the first important issue where there has been a struggle to gain consensus about what to do. While not ideal, I don't think this is a fatal problem. It's not that the problem has no solution, it's that everyone can't agree on which solution is best, and there's no immediate need to since there have not been many symptoms of the problem yet. I do fear it will not get resolved until it becomes urgent, but I think it will get resolved quickly in that case. If transaction capacity gets exhausted, the blocksize will increase one way or another.

As a bitcoin enthusiast it has been fascinating to watch, for the first time we have two competing implementations of bitcoin. We've seen the actual power, or rather lack thereof, that core developers have over bitcoin, as we saw that 1) it is possible for the core devleopers to disagree, and release non-compatible competing versions of the software and 2) that ultimately the network as a whole and not any set of developers will decide what software actually runs and thus what the definition of bitcoin is.

As for the recent pop to $500, people are looking for the one reason that caused it. Firstly, i was monitoring the exchanges and every string upward move originated in China, and secondly I don't think there is a singular reason. People were saying that bitcoin had been going down since the gox bubble 2 years ago, but it's not true. The bottom was January this year, and it's been sideways since then. Many who sold on the down trend were just waiting for a clear bottom to buy back in, so when you get any kind of significant upward movement it's easy for a positive feedback loop to start and we get the hockey stick we've seen before. It looks like it's cooling off now, but I know better than to definitively try and call a top or bottom though.

Mullicker

Let me clarify that I own some bitcoin, having bought a little to play around with a couple of months ago. I like its decentralization. And I like all the creativity and innovation surrounding bitcoin.

My main issue is bitcoin's lack of anonymity. In looking at some alt-coins I see Dash and Monero offering substantial improvement in this area.

Capt'n Midnight

Just a reminder. Activision spent $5.9bn to get Candy Crush. AFAIK this is still more than the total valuation of Bitcoins.

Bitcoin has to continually guard against a fork. And guard against people thinking there's a cartel. And rely on people processing the chain. Like any currency it's based on trust.


I'm still not convinced that bitcoins have intrinsic value. We are getting rid of 1c and 2c coins because they cost more than they are worth to produce. But this is also true of US 1c coins. But here's the thing, over multiple transactions they generate more wealth than they are worth and physical coins churn over fast. Bitcoins take resources to mine and this will increase over time. I'm not convinced that they will repay the energy investment in them.

pH

I'm still of the belief that a bitcoin will either end up worth a tremendous amount of money or worth nothing - sure there's money to be made in the short term speculating as the price rises and falls, but long term either bitcoin succeeds or fails. If it succeeds then the sky's the limit, I'm still sitting on my €45 coins - it's been a lot slower than I expected, but I still think that crypto currencies have a bright future - whether that's bitcoin or a different scheme is another question however.

alb

Capt'n Midnight wrote: »

Just a reminder. Activision spent $5.9bn to get Candy Crush. AFAIK this is still more than the total valuation of Bitcoins.

There are currently just over 14.8m bitcoins in existence, times current price of $385 gives 5.6 billion total value. We know some of those coins are lost forever, at least 10s of thousands but it could be any amount and we know the price is volailte, but yeah, in the grand scheme of things bitcoin is not worth all that much yet, which is why the price is relatively volatile.

On that note, I've recently seen some comments elsewhere about the price approaching the price of gold. People tend to compare the price of 1 bitcoin to the price of one ounce of gold, because they are both the most commonly used units, but is that a reasonable comparison? why not a gram, why not a kilo?

The BBC in 2013 says there's an estimated 171,300 tons of gold, which I calculate to be 5,481,600,000 ounces, so it's a lot less scarce than the 21m bitcoin limit.

Capt'n Midnight wrote: »

Bitcoin has to continually guard against a fork. And guard against people thinking there's a cartel. And rely on people processing the chain. Like any currency it's based on trust.

I'm not sure that guard is the right word here. Bitcoin forks if the majority decide to fork. Bitcoin is defined by the chain with the most mining work. Cartels only work if there's a monopoly, but bitcoin competes with other crypto-currencies, miners and/or bitcoin companies forming a cartel to attack the users would be a great way to just push users to a competitor, as in that bitcoin is no longer decentralised, no longer a crypto-currency really. There's no lock in with bitcoin, I can have them on an exchange and changed to another crypto within an hour if I choose.

Capt'n Midnight wrote: »

I'm still not convinced that bitcoins have intrinsic value.

The intrinsic value argument usually boils down to semantics. By the typical usage for equities bitcoin has zero intrinsic value, if its monetary value goes to zero it is worthless otherwise. If your 1 ounce gold coin loses its monetary value, you can still make a spoon out of it. I think why people struggle with bitcoin in this regard is that we're not used to digital things being scarce - we can make unlimited websites, emails, tweets, copies of media files etc. Domain names might be the only other good example. What's the intrinsic value of the domain name google.com?

The bottom line is that everything in the world which is scarce and useful has value. Air is essential but not scarce so it is has no price, my childhood paintings are scarce but useless and also have no price. If bitcoin continues to be scarce and useful it will have a value. A common counterpoint to this is that bitcoin units may be scarce but cryptocurrencies are not, because anyone can clone the bitcoin software and release a copy cat, and indeed they have. But they can't easily copy the bitcoin ecosystem, the mining security, the critical mass of users, the services that support it.

Capt'n Midnight wrote: »

We are getting rid of 1c and 2c coins because they cost more than they are worth to produce. But this is also true of US 1c coins. But here's the thing, over multiple transactions they generate more wealth than they are worth and physical coins churn over fast. Bitcoins take resources to mine and this will increase over time. I'm not convinced that they will repay the energy investment in them.

The resources required to mine bitcoins will always follow the value of bitcoin. The difficulty adjusts upwards or downwards as is appropriate. If you were mining bitcoins and it was unprofitable would you continue to mine? would you spend 100 euro in electricity a month to mine 90 euro worth of bitcoin? Of course not, you'd stop mining. Bitcoin doesn't depend on all miners making a profit, only that there are enough miners.

alb

Coming back to the scalability issue mentioned on the last page. This is a pretty good 15 minute overview of payment channels. These allow multiple trust-less irreversible payments to be made from one party to another during a fixed period of time, but resulting in only 2 actual bitcoin transactions added to the blockchain to settle the final balance.

It's a bit technical, you need to understand the concepts of signing and broadcasting transactions and multi-sig addresses.

zulutango

I'm new to Bitcoin but from what I've been reading it seems very revolutionary to me. The notion that you can make a transfer of money without involving a third party such as a bank is kinda astounding.

A query I have is this though. I transferred a tiny amount of Bitcoin from one wallet to another. The fees ended up amounting to about 10% of the amount that I transferred. So, I'm just wondering, who sets these transfer fees and are they proportionately less if you send larger amounts?

alb

zulutango wrote: »

A query I have is this though. I transferred a tiny amount of Bitcoin from one wallet to another. The fees ended up amounting to about 10% of the amount that I transferred. So, I'm just wondering, who sets these transfer fees and are they proportionately less if you send larger amounts?

The amount of the fee is decided by the person making the transactions, in your case your wallet software most likely used a default fee, but there was probably a way you could have set it manually.

Fees are technically optional, but act as an incentive for miners to include your transaction in a block (and therefore in the blockchain). Miners get to keep any fees for any transactions they include in a block that they mine. So to date miners have prioritised transactions with the highest fees and included ones with no fee attached when there is spare space in a block. So during time of high transaction volumes when blocks have been full there can be quite a delay for no-fee transactions. A fee of about 0.00001 BTC is typically sufficient at present.

The fee is independent of the amount of bitcoins being sent. For example here's a transaction that sent almost 200,000 bitcoins and paid no fee

The nature of fees will most likely change in the long run depending on how bitcoin evolves. As the number of new bitcoins awarded to miners decreases gradually, the fees will become the primary reward for miners. The scarcity of, and demand for, space in mined blocks will ultimately determine the fees people are willing to pay to make a transaction. This will depend on how popular bitcoin is, how much larger blocks can be made, and whether future advances in the technology will allow many small micro-transactions each with a small fee to be combined into one bitcoin transaction.

scamalert

zulutango wrote: »

I'm new to Bitcoin but from what I've been reading it seems very revolutionary to me. The notion that you can make a transfer of money without involving a third party such as a bank is kinda astounding.

A query I have is this though. I transferred a tiny amount of Bitcoin from one wallet to another. The fees ended up amounting to about 10% of the amount that I transferred. So, I'm just wondering, who sets these transfer fees and are they proportionately less if you send larger amounts?

unless you mine bicoin yourself which is impossible considering amount you'd make vs energy price wasted,bitcoin pretty much ended like bank>buy btc using your cash>send btc pay fee on top>receive btc use bank to convert it back to real money.
So unless your buying stuff that otherwise wouldnt be possible then theres just investment into nothing hoping price will go up to sell to someone else :pac: since btc dont generate value-as companies or stocks do rather its at a point where few large Chinese factories can manage to mine it and still make profit and keep it alive.

zulutango

I'm living in Limerick and all the atms are really concentrated in the city centre. I bumped into a friend who I owed a few quid to this morning but didn't have the cash on me and the nearest atm was ages away. So, I half-joked to my friend that if he had a bitcoin wallet I could just transfer him the equivalent in bitcoins straight away. Was surprised when he agreed to it (although he didn't actually have a wallet). I'm starting to realise just how neat this technology is.

alb

January 3rd was the 7th birthday of the Bitcoin network. Just before that, on Christmas day, the 100 millionth transaction was mined and the number of mined coins reached 15 million, meaning there are only 6 million remaining to be mined. This summer the block reward will half to 12.5 coins per block. Bitcoin is reaching the end of the 'distribution' phase, as annual monetary inflation will go from over 9% to around 4.5% continuing to reduce each year.

After spending nearly all of 2015 in the $200-$300 range, it broke upwards into the 300s at the end of October and quickly up into the 400s in December, where it has stayed since then. People had been saying Bitcoin had been falling for 2 years after the end of 2013 bubble, but in hindsight it seems it fell for one year bottoming out almost a year ago at $170 on Jan 14th 2014.

If bitcoin is to thrive in the post-distribution phase, the transaction volume and/or the transaction fees must increase. There is still heated debate among developers, exchanges, miners and users about how this should happen, and what direction bitcoin should take in the near future. This has escalated into petty personal arguments and censorship of two of the main bitcoin forums among other things which has led to splits in the community. On the plus side it's also led to new ideas and innovation regarding scaling solutions.

Overall this war doesn't concern me too much. sooner or later due to the open source nature of bitcoin with nobody in charge this was likely to happen. If a widely used cryptocurrency system is useful and desirable, and it's technically possible to create one, then one will exist. i consider 4 ways this can play out:

1) bitcoin core developers implement a sufficient scaling solution which everyone is happy to run
2) bitcoin core developers do not implement a scaling solution, someone else does instead. The blockchain forks, one of the forks wins. This is a messy outcome, but everyone will almost certainly migrate to the winning fork very quickly.
3) bitcoin core developers do not implement a scaling solution. None is needed because additional layers on top of bitcoin (lightning network, sidechains, payment channels etc) provide sufficient scaling in due time.
4) bitcoin core developers do not implement a scaling solution and there is no fork or successful additional layers. Bitcoin fails to scale, another cryptocurrency willing to scale overtakes bitcoin as the leading cryptocurrency. I suspect the threat of this is enough to prevent it from happening.

It would not surprise me if this year provides a perfect storm of events for bitcoin to bubble up again: Global markets struggling, along with Chinese currency devaluation, the reward halving and a resolution to the scaling issues, but it's bitcoin so who knows

scamalert

like your post,and have read months before about division happening-truly not that interested how it works out-but seems like most possible scenario.

Since rewards are being cut down,the increase in price is natural-since not only it takes say as twice much amount or power to mine them,since running costs can barely support the reward,and chain reaching depletion basically someone would need to be willing to buy them at ever increasing prices just to keep Chinese farmers running-but even in that case most likely next bubble when it reached another peak would wipe out the currency when major holders would decide to cash in.

another reason is inflation as price ever increases the coins are split into 000000 values,while it has potential to be split to last 0 and make it enough to go around for everyone,its not close happening,since its just simple principle why we dont use notes such as 1000000 or 10000 its hassle of getting change in nominal value,which btc has ingrained in it started at 1coin now its 0.34454655 or smth like that,thus example of say euro becoming 100cents is ok,but split it into 0.01 and you have nonsense.

Also i wouldn't compare btc to have any effects to do with economy-regular people dont use them daily and its scarce nor they are based on something to be considered as secure alternative.

Last thing as many times said its usage is too complicated-see any video where it takes amount to make transaction for something and youd split your own head while waiting in ques,it started as idea tax free and trail free crypto currency,now you supply almost your full details if buying any,and to check out you still use banks etc,and paying taxes for people that just use energy to make them,and other fees of purchase on top.

zulutango

I gather from a cursory look at the reddit forums that something significant has happened in the last few days in terms of the development of bitcoin. Can anybody explain in layman's terms? Do we now have two kinds of bitcoin?

positron

It caught my attention too (I have no bitcoins, just a curious observer). Mike Hearn, one of the guys who worked with Gavin Anderson and the rest of the 'Bitcoin Core' team left (as in sold whatever coins he had, and said this whole thing is going tits up) and wrong this blog explaining his reasons.

https://www.reddit.com/r/Bitcoin/comments/40zhgi/mike_hearn_the_bitcoin_believer_who_gave_up/

I feel he is right about how it should be - no one should have the power to stop or hold back the block size increment (or whatever else) - I too thought bitcoin is a truely hands off mathematical "truth' based system that just reacts to the amount of processing power that's throw at it (which naturally will go up or down). Doesn't seem to be the case. However I am not sure if that means it's the end. What if they / majority sticks with Bitcoin XT, or some other fork? I am not sure how the Bitcoin Core team can control that? Are they really behind the DDoS attacks?

Perhaps alb can help us understand it better.

KomradeBishop

Yea looks like now, judging by that blog post, the technological issues with Bitcoin aren't actually the main problem - trivial to fix technically - but the nail in the coffin is about to be the top-down control of the infrastructure (which will still be an issue even if Bitcoin is replaced with another cryptocurrency), as well as the means of disseminating updates to the community (since prominent/influential platforms for the community seem to now be 'captured'/censored).

When powerful elements within the community, along with those who control the infrastructure, are openly corrupt and are deliberately trying to slam Bitcoin into a technological roadblock - as the above looks a lot like - then it seems like the endgame for the main Bitcoin cryptocurrency is near, and that people unwise enough to invest in Bitcoin, should start dumping them before it all unfolds.